Fiscal Note - SB 6149, Definition of Rural County (Department of Revenue, 1/27/2026)
Summary
This is the Department of Revenue Individual State Agency Fiscal Note # 6149-1 on SB 6149, an act relating to the definition of "rural county" for purposes of public facilities funding. The current-law section says rural counties may impose a state-shared tax to finance public facilities that serve economic development purposes, at a rate up to 0.09%. The Revenue Impact by Biennium table lists GF-State Retail Sales Tax and GF-State Business and Occupation Tax amounts in parentheses, with totals of (14,415,000), (33,252,000), and (35,852,000) for the first, second, and third biennium. The note also lists total estimated expenditures of 97,400 for 2025-2027.
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“Fiscal Note - SB 6149, Definition of Rural County (Department of Revenue, 1/27/2026).”
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Individual State Agency Fiscal Note
Bill Number: SB 6149 Bill Title: AN ACT Relating to the definition of Agency: 140
"rural county" for purposes of public facilities Department of Revenue
funding
Part I: Estimates
[ ] No Fiscal Impact
Estimated Cash Receipts to:
Fund Fiscal Year 2026 Fiscal Year 2027 2025-2027 Total 2027-29 Biennium 2029-31 Biennium
GF-State Retail Sales Tax (14,300,000) (14,300,000) (33,000,000) (35,600,000)
GF-State Business and
(115,000) (115,000) (252,000) (252,000)
Occupation Tax
Total (14,415,000) (14,415,000) (33,252,000) (35,852,000)
Estimated Expenditures from:
Fiscal Year 2026 Fiscal Year 2027 2025-2027 Total 2027-29 Biennium 2029-31 Biennium
FTE Staff Years .19 .4 .29
Fund
GF-State 001 25,800 71,600 97,400
Total 25,800 71,600 97,400
The revenue and expenditures estimates on this page represent the most likely fiscal impact. Factors impacting the precision of
these estimates, and alternate ranges (if appropriate), are explained in Part II.
Check applicable boxes and follow corresponding instructions:
[X] If fiscal impact is greater than $50,000 per fiscal year in the current biennium or in subsequent
biennia, complete entire fiscal note form Parts I-V.
[ ] If fiscal impact is less than $50,000 per fiscal year in the current biennium or in subsequent biennia,
complete this page only (Part I).
[ ] Capital budget impact, complete Part IV.
[ ] Requires new rule making, complete Part V.
Legislative Contact: WILLIAM BRIDGES Phone: 360-786-7424 Date: 1/14/2026
Agency Preparation: DIANA TIBBETTS Phone: (360) 534-1520 Date: 1/27/2026
Agency Approval Valerie Torres Phone: (360) 534-1521 Date: 1/27/2026
OFM Review: Phone: Date:
OFM Form FN (10/95)
Fiscal Note # 6149-1
Bill # SB 6149
1
Part II: Narrative Explanation
II. A - Brief Description Of What The Measure Does That Has Fiscal Impact
CURRENT LAW:
Rural counties may impose a state-shared tax to finance public facilities that serve economic development purposes. The
tax rate is up to 0.09%. Rural counties are counties with a population density of less than 100 people per square mile or an
area of less than 225 square miles.
In addition to the rural county tax, the definition of rural county (RCW 82.14.370) is used for the new employee business
and occupation (B&O) tax credit. This credit is for new qualified employment positions at eligible business projects in
rural counties. The credit is worth $4,000 for each qualified employment position with wages and benefits over $40,000
annually, or $2,000 for each qualified employment position with wages and benefits of $40,000 or less annually, that is
directly created in an eligible business project. The B&O credit has an annual cap of $7.5 million.
PROPOSAL:
This bill additionally allows a county with a population density of 100 people per square mile or greater, with no city with
a population greater than 75,000 people, to meet the definition of a rural county.
EFFECTIVE DATE:
The bill takes effect 90 days after the final adjournment of the session.
II. B - Revenue Impact
ASSUMPTIONS:
- This proposal adds Cowlitz, Kitsap, and Thurston counties as rural counties.
- Cowlitz County imposed the rural county tax before August 1, 2009, which allows the county to continue to receive
rural county tax distributions until December 31, 2054.
- The Department of Revenue (department) receives the taxes from monthly taxpayers the month after the business
collects the sales tax from the consumer. Most local tax distributions occur the month after the department receives sales
and use taxes that businesses collect. This leads to a one-month delay in revenue impacts for the state and a two-month
delay in revenue impacts for local jurisdictions.
- Kitsap and Thurston counties will impose the rural county tax beginning July 1, 2026, impacting 11 months of impcted
state collections and 10 months of local tax collections in fiscal year 2027.
- The Performance Audits of Government account receives a 0.16% share of retail sales and use taxes collections. The
state-shared local tax amounts exclude the amount the Performance Audits of Government Account receives.
- Beginning July 1, 2027, the Multimodal Account receives 0.1% of retail sales and use taxable amounts. The state-shared
local tax amounts exclude the amount the Multimodal account receives.
- Currently, Tribes with compacts receive a share of state sales and use taxes and certain business and occupation taxes
(RCW 43.06.523). Additionally, local governments may also receive a portion of state sales and use taxes. Under this
legislation, the amount of revenue shared with Tribes may decrease.
- Historically, the new employee B&O tax credit program has not reached the annual cap; the addition of Kitsap and
Thurston counties will not cause the cap to be reached.
- Two taxpayers per county will use the new employee B&O credit each fiscal year, with the addition of Kitsap and
Thurston as rural counties.
- The annual growth of the rural county tax reflects the Economic and Revenue Forecast Council's November 2025
taxable retail sales forecast.
DATA SOURCES:
- Department of Revenue, Excise tax data
OFM Form FN (10/95)
Fiscal Note # 6149-1
Bill # SB 6149
2
- Office of Financial Management, Population forecasts and projections
- Economic and Revenue Forecast Council, November 2025 forecast
REVENUE ESTIMATES:
This bill decreases state revenues by an estimated $14.415 million in the 11 months of impacted collections in fiscal year
2027, and by $16.326 million in fiscal year 2028, the first full year of impacted collections.
This bill also increases local revenues by an estimated $13.0 million in the 10 months of impacted collections in fiscal
year 2027, and by $16.2 million in fiscal year 2028, the first full year of impacted collections.
TOTAL REVENUE IMPACT:
State Government (cash basis, $000): None.
FY 2027 - ($ 14,415)
FY 2028 - ($ 16,326)
FY 2029 - ($ 16,926)
FY 2030 - ($ 17,626)
FY 2031 - ($ 18,226)
Local Government, if applicable (cash basis, $000):
FY 2026 - $ 0
FY 2027 - $ 13,000
FY 2028 - $ 16,200
FY 2029 - $ 16,800
FY 2030 - $ 17,500
FY 2031 - $ 18,100
II. C - Expenditure Impact
FIRST YEAR COSTS:
The department will incur total costs of $25,800 in fiscal year 2026. These costs include:
Labor Costs – Time and effort equate to 0.19 FTE.
- Create a special notice and update relevant information on the department’s website.
SECOND YEAR COSTS:
The department will incur total costs of $71,600 in fiscal year 2027. These costs include:
Labor Costs – Time and effort equate to 0.4 FTE.
- Amend one administrative rule.
- Amend two excise tax advisories.
- Process tax return work items, assist taxpayers with reporting questions, and respond to inquiries via email, web
message, and paper correspondence.
- Examine accounts and make corrections as necessary.
- Set up, program, and test computer system changes.
Object Costs - $18,700.
- Computer system changes, including contract programming.
ONGOING COSTS:
OFM Form FN (10/95)
Fiscal Note # 6149-1
Bill # SB 6149
3
There are no ongoing costs.
Part III: Expenditure Detail
III. A - Expenditures by Object or Purpose:
Fiscal Year 2026 Fiscal Year 2027 2025-2027 Total 2027-29 Biennium 2029-31 Biennium
Salaries and Wages 16,400 34,200 50,600
Benefits 5,900 12,300 18,200
Personal Service Contracts 18,700 18,700
Supplies & Material 2,700 5,000 7,700
Office Equipment 800 1,400 2,200
Total 25,800 71,600 97,400
III. B - FTE Detail:
Job Classification Salary FY 2026 FTEs FY 2027 FTEs 2025 - 2027 Total 2027 - 2029 2029 - 2031
EMS BAND 4 139,704 .01 .01
EMS BAND 5 163,205 .01 .01
EXCISE TAX EX 4 75,112 .1 .05
IT SYS ADM-JOURNEY 102,427 .2 .1
MGMT ANALYST4 80,822 .01 .01
TAX POLICY SP 2 82,874 .12 .01 .07
TAX POLICY SP 3 93,800 .06 .04 .05
TAX POLICY SP 4 100,981 .01 .01
WMS BAND 2 100,662 .01 .01
WMS BAND 3 114,564 .01 .01
Total .19 .4 .33
III. C - Expenditures by Program (optional):
Fiscal Year 2026 Fiscal Year 2027 2025-2027 Total 2027-29 Biennium 2029-31 Biennium
Total
Part IV: Capital Budget Impact
None.
Part V: New Rule Making Required
Should this legislation become law, the department will use the expedited process to amend WAC 485-20-240, titled:
"Manufacturer's new employee tax credits."
This rulemaking would affect rural data centers, certain manufacturers, and research and development facilities.
OFM Form FN (10/95)
Fiscal Note # 6149-1
Bill # SB 6149
4
Revenue Impact Detail
First Biennium Second Biennium Third Biennium
FUND SOURCE CODE 1st YEAR 2nd YEAR 3rd YEAR 4th YEAR 5th YEAR 6th YEAR
GF-State Retail Sales Tax 0101 (14,300,000) (16,200,000) (16,800,000) (17,500,000) (18,100,000)
GF-State Business and Occupation Tax 0105 (115,000) (126,000) (126,000) (126,000) (126,000)
Total (14,415,000) (16,326,000) (16,926,000) (17,626,000) (18,226,000)
OTHER
Total
Net (14,415,000) (16,326,000) (16,926,000) (17,626,000) (18,226,000)
Revenue Impact - by Biennium
FUND SOURCE CODE 1st Biennium 2nd Biennium 3rd Biennium
GF-State Retail Sales Tax 0101 (14,300,000) (33,000,000) (35,600,000)
GF-State Business and Occupation Tax 0105 (115,000) (252,000) (252,000)
Total (14,415,000) (33,252,000) (35,852,000)
OTHER
Total
Net (14,415,000) (33,252,000) (35,852,000)
OFM Form FN (10/95)
Fiscal Note # 6149-1
Bill # SB 6149
5
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